it’s official. The NFL’s Sunday Ticket is coming to Google-owned YouTube. The deal is strong for both the league and Alphabet (GOOGL), Google’s parent company and club holding company. It’s not hard to see why the National Football League would want to distribute their games on established streaming players like YouTube. We want to convert as many YouTube users as possible into Sunday Ticket subscribers, turning casual viewers into loyal fans. For Alphabet, the deal adds a loyal audience base to its vast ecosystem of services and products and provides an opportunity to collect user data and target ads more effectively. And that seven-year deal would cost YouTube about $2 billion a year for Sunday Ticket residency. The Sunday Ticket has been broadcast on DirecTV’s satellite service since his 1994 inception. The move brings another of his prized sports properties from legacy platforms to streaming. Amazon (AMZN) already has Thursday Night Football, while Apple (AAPL) had previously secured the rights to Major League Baseball and Major League Soccer games. It should also be attractive to companies advertising during games. That’s because Alphabet can give ad buyers far more data than they can access with untargeted, linear satellite distribution. What’s good for ad buyers is good for Alphabet. It also helps make YouTube’s premium service (a requirement for watching games) more attractive, which in turn drives the subscription revenue generated from the platform. Subscription services are quickly becoming the bread and butter of many large tech companies. Investors prefer stable and reliable recurring returns. Especially at a time when online advertising as a whole is roughly patching against the challenging backdrop of domestic and global macroeconomics. Alphabet’s third-quarter earnings and earnings, announced in October, fell short of expectations, in part due to a slowdown in advertising spending. Conclusion At the end of the day, we don’t think the Sunday Ticket Deal alone will make much of a difference at this point. But we think it could increase in the short to medium term and more in the long term. As pointed out in Thursday’s “morning meeting” for club members, monetization opportunities aren’t clear beyond additional advertising and YouTube subscription revenue. But by owning the rights to air Sunday NFL games, Alphabet offers another way for Alphabet to engage viewers and show off what else its ecosystem has to offer. (Jim Cramer’s Charitable Trusts are GOOGL, AMZN, and his AAPL. For a full list of shares, see here.) Subscribers to Jim Cramer’s CNBC Investing Club will be able to trade with Jim. Receive trade alerts before Jim waits 45 minutes after sending a trade alert before buying or selling shares in his charitable trust portfolio. If Jim talks about his stock on his CNBC TV, he will wait 72 hours after issuing a trade alert before executing the trade. The investment club information above is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duty or obligation exists or is created by your receipt of any information provided in connection with The Investment Club. No specific results or benefits are guaranteed.
This October 4, 2020 file photo is of an empty Levi’s Stadium before an NFL football game.
Tony Aveler | AP
it’s official. The NFL’s Sunday Ticket is coming to Google-owned YouTube. This deal is a strong one for both the league and the league. alphabet (GOOGL) is the parent company of Google and the holding company of Club.